Profits have plummeted collectively, and a large number of cross-border sellers are "crying to survive"!

Who stole the profits of cross-border sellers?

The 2021 peak selling season is approaching, but a large number of disheartened Amazon sellers have directly announced their withdrawal from the peak season battle, and said that they would be satisfied to be able to "survive" on the Amazon platform in 2021.

Many outsiders may find it difficult to understand this state of lack of fighting spirit, but insiders can empathize with it.

From 2020 to 2021, Amazon sellers have deeply experienced the tremendous changes in the living environment:

In 2020 , a large number of Amazon sellers were enjoying great success, but in 2021 , new entrants simply fell where they were and were unable to get up .

In 2020 and even early 2021, cross-border sellers still firmly believed in the winning rule of " If you don't fake orders, you will die, but if you don't die, you will succeed in selling out. " In 2021, a large number of cross-border sellers have already started to "change color at the mention of fake orders."

In 2020, Amazon sellers generally believe that the winner is the king. In 2021, they no longer think about how to make money, but instead regard the four words "the last one standing is the king" as a guiding light on the road ahead!

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" This industry may seem glamorous , but it's actually very hard . The profits from this year's products are so low that I'm questioning life. " What factors are causing these sellers to lament in common?

The last one standing will be the winner! Profits plummeted in 2021 , and a large number of cross-border sellers are "crying to survive"

"Amazon is really not profitable", "Product profits are getting thinner and thinner", " When there are no orders, I wonder, if I don't do Amazon, what else can I do ? " The editor observed that this year, the topic of discussing the difficulty of doing business on Amazon is very hot, and many sellers said that the product profits have been cut in half:

A: After calculating the profits every day , I feel that this product cannot be made , but I have to do it!

B: At this time last year, the overall profit margin of the company's products was still over 30%, but this year it was cut in half to 10%.

C: It’s the same for us . The company as a whole has decreased by 10% during the same period .

D: I thought I could make some profit, but when I saw the high storage fees, my profit evaporated instantly.

E: The products cannot be sold even at a reduced price . Now I dare not even hope for profit, I just hope not to lose money.

F: Sellers on the European site are in an even worse situation. After the tax reform, profits have hit a new low. I now dare not calculate the profits for July.

In the context of a collective drop in profits, many sellers have begun to lower their standards in product selection. One seller said that in the past, when selecting products, after deducting 10% advertising fees and 5% return fees , products with profits below 25% would not be considered . But now, even if the profit is below 25%, he will seriously study the product.

The peak season in the second half of the year is getting closer, but many Amazon sellers have become pessimistic in advance due to various realities. The editor learned that the strategy of many sellers to deal with the peak season is to be conservative, conservative and conservative again.

Industry insider "Rainier Snow Mountain 2021" said that his friends are also pessimistic about the peak season in the second half of the year for the following reasons:

1. Due to the resurgence of the epidemic, it will still be impossible to resume work on a large scale in the second half of the year.

2. Inflation is getting worse. The skyrocketing prices of various raw materials and logistics will inevitably be reflected in the terminal prices.

3. The supply chain continues to be tight. Many customers can no longer afford the current shipping prices, and at the same time, shipping prices continue to rise.

4. Traditional large companies have gone overseas directly, and some have been very successful, directly squeezing out small and medium-sized players.

"Not seeking to make money, but just seeking to survive" has become a catchphrase for many sellers. In difficult times, the saying "survival is king" has also been widely mentioned by sellers. What does "survival is king" mean? One seller explained:

The time for making quick money has passed . Whoever holds out to the end will win. To be specific, the product should be prepared to break even or make a slight loss in the first two years. Once you have outlasted others, the remaining sellers can start making money!

Given the miserable situation that Amazon sellers are having this year, they have to unconditionally accept the reality that their ability to make money is not as good as that of service providers. At the same time, many sellers have spontaneously become service providers (knowledge payment) in order to survive.

The main reason for the sharp drop in sellers’ profits

In fact, summarizing the survival status of sellers this year, it can be found that the low-price spiral, skyrocketing freight costs, and rising costs caused by compliance have become important driving forces behind their sharp drop in profits.

Does compliance cause temporary "incompatibility"? Sellers: After everything was compliant, the net profit turned negative. According to sellers' feedback, as Amazon is taking drastic measures to rectify violations, sellers have to refocus their attention on the road to compliance. But the road to compliance is also "full of difficulties." A seller said that the premise of compliant operation is heavy assets and refined operation , but the promotion fees of many big sellers are directly the turnover of small sellers. Small and medium-sized sellers do not have enough money to compete with big sellers, and in the end they are "dead".

In addition, many Amazon sellers have now shifted from the battlefield of fake orders to the battlefield of advertising, which has resulted in a surge in advertising fees . My brother-in-law continues to make a fortune, while Amazon sellers are left with nothing but poverty.

It is worth mentioning that sellers on the European site have been in dire straits recently. Due to the direct tax deductions on the European site, many Amazon European sellers are making a loss this year.

Low-price spiral: How can Amazon survive when there is a bloody storm ? An industry insider said that too many newcomers entered Amazon this year, and new products were directly introduced at low prices. Old sellers also sold goods at low prices due to storage capacity issues . As a result, normal sellers suffered and were forced to follow the low-price spiral. The result of all these internal conflicts is that the entire category is "scrapped".

Industry insiders also added that many of the top sellers on Taobao and Tmall in China are also planning to sell on Amazon. They are not looking for profits but for volume , and they will immediately invest money and resources for an 8% profit . Small and medium-sized sellers have no money and no resources, and can only watch their profits being swallowed up with tears in their eyes.

Shipping costs eat up more than half of the profits , and sellers dare not raise prices . Industry insider Qin Jiangang said that cross-border sellers , especially those who sell large items , are already struggling as the first-leg shipping costs of international routes have skyrocketed by 5 times. At least in terms of product selection , many sellers dare not rashly develop large items .

Sellers of small and medium-sized goods are also in a bad situation . Although a cabinet can hold a lot of goods , the freight cost is now 4-5 US dollars , which is unacceptable compared to the previous one US dollar for the first leg. According to normal logic, when the freight rate rises, sellers should raise prices to protect profits , but the reality is that others are spiraling at low prices, and sellers have to make losses to gain publicity.

In fact, it seems that freight rates can only get higher and there is no maximum . With the arrival of the peak season in the second half of the year, the soaring freight rates will only intensify.

Others analyzed that the recovery of physical stores in the European and American markets has also diverted a lot of customer traffic, which is also an important reason why Amazon is having a hard time doing business this year.

Although there have been many changes on the Amazon platform this year, the more difficult the situation is, the more sellers must focus on profits and turnover. They don’t have to have many products, but they must adhere to the principles of high profit margins and high turnover rates . Now that Amazon has passed the stage of making quick money, if the majority of Amazon sellers want to continue to delve deeper into the platform, they still need to adjust their mindsets as soon as possible and look for opportunities in the crisis.

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